Report: Lenovo Mulling Mobile Reorg to Rebuff Rivals

Lenovo might reorganize its mobile business unit following the appointment last month of company veteran Chen Xudong to run the division and chair Motorola Mobility.

Facing somewhat disappointing smartphone sales, Chinese manufacturer Lenovo might reorganize its mobile business unit following the appointment last month of company veteran Chen Xudong to run the division and chair Motorola Mobility, according to a report in the South China Morning Post.

SCMP picked up a research note from Ken Hui, Jefferies equity analyst, published last week in which he speculated the PC and device maker will “soon announce organizational changes in the mobile business” in response to its smartphone sales underperforming in China.

Hui reportedly did not provide any additional details.

Chen, who joined Lenovo in 1993, had been overseeing the vendor’s business and operations in China and in Asia Pacific emerging markets. As executive vice president of Lenovo’s Mobile Business Group, he is charged with pumping up Motorola Mobility sales, which are said to be losing share in key markets along with weakening demand for Lenovo-branded smartphones in China.

The company already has said it will protect the Motorola brand in segments where it’s strong but may nix it in other regions.

Chen replaced Liu Jun, who has been appointed a special consultant to Lenovo chairman and chief executive Yang Yuanqing on mobile business and strategy, the report said. Chen is likely to face some heat to bring the vendor’s mobile business profitable as early as this year.

In May, Lenovo said it posted FQ4 mobile division sales of $2.8 billion, shipping 18.7 million smartphones in the quarter and a record 76 million for the full year. On an annual basis, China accounted for 59 percent of Lenovo’s smartphone sales, while the vendor shipped some 31 million units outside the country for a 450 percent growth.

“We are confident on the leadership of Chen Xudong in the mobile business division,” Yang reportedly said at the company’s annual general meeting last week in Hong Kong.

Yang’s steadfast position has been that Motorola will break even in 12 to 18 months and the vendor’s smartphone growth will come from markets outside its native China. Lenovo is aiming for smartphone sales of about 100 million units in its current fiscal year ending March 2016.

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